Exposed: EU Commissions Heavy Fine on Delivery Hero and Glovo for Cartel Activities
Delivery Hero Faces Hefty Million-Dollar Penalty from Criminal Cartel
Light and lively writing with a touch of modern lingo:
Delivery Duo, Delivery Hero & Glovo, Slapped with a Whopping €329 Million Fine
Obviously, the European Commission has wrapped up an antitrust snoop into Delivery Hero and Glovo, doling out a massive €329 million in fines for them participating in a cartel in the food delivery biz. Here's a lowdown on what went down:
What Caught Their Eye?
- Period & Coverage: The shady dealings lasted from July 2018 to July 2022 and encompassed the entire European Economic Area (EEA).
- Information Exchange: Delivery Hero's minority stake in Glovo enabled the sharing of sensitive commercial data, such as strategies, prices, capacities, costs, and product features, letting them synchronize their business plans and market positions.
- Market Division: They agreed to avoid each other's national markets and plot out market entry strategies together where neither was present. This created a monopoly-like situation for them.
- No-Poachers: They promised not to poach staff from one another, also known as "no-poach" agreements, which the Commission claims harms employees by curbing labor mobility and wage growth[1][2][3].
Hefty Penalties
- Total Bill: €329 million in fines.
- Breakdown: Delivery Hero got hit with €223 million, while Glovo was fined €106 million[3][4].
- Bargain: Both companies admitted involvement in the cartel and cut a deal, shaving 10% off the total[3][4].
Aftermath and Future Steps
- New Sheriff in Town: This case represents the first time the Commission has penalized companies for "no-poach" agreements and abusing minority stakes for anti-competitive motives[4].
- Keep an Eye Out: The Commission will be keeping a closer watch on minority shareholder agreements to prevent similar shenanigans in other industries[2][4].
[1] https://ec.europa.eu/competition/antitrust/legislation/ horizontal_rules_agreements_art_101.html
[2] https://www.reuters.com/world/eu/european-commission-to-fine-delivery-hero-subsidiary-for-cartel-activity-sources-2023-04-06/
[3] https://www.reuters.com/world/europe/delivery-hero-glovo-fined-hundreds-million-euros-european-commission-cartel-2023-04-06/
[4] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1208
- It's evident that the finance department of Delivery Hero and Glovo will have to factor in a hefty €329 million penalty as part of their employment policy, considering the European Commission's antitrust fine for their cartel activities.
- As the European Commission continues to monitor the business world closely, vocational training programs for employees may need to include lessons on ethical business practices and the implications of 'no-poach' agreements, following the massive fine imposed on Delivery Hero and Glovo for such practices.
